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Written 4 April 1996

An edited and doubtless thus improved version of this article appeared in Internet Today.

This version is © copyright 1996 Mike Holderness; moral rights are asserted.

One defence against money-laundering is to set limits on the size of transactions. This is futile in cyberspace; computers can tirelessly transfer funds a penny at a time, if need be. "Rather, constraints are needed on the rate at which an individual user or device transfers money over the NII," concludes a paper for XIWT, a "multi-industry coalition committed to defining the architecture and key technical requirements for a powerful and sustainable national information infrastructure (NII), comprised of leading information technology and product suppliers". "Additionally," the paper continues:

"transaction amounts (e.g., the total amount transferred over a given period by a given user or device) should be monitored. The ability to perform this monitoring raises questions about how the electronic token system is implemented. Should tokens be tagged so that flows (perhaps of a given minimum value) of electronic currencies across geographic boundaries (e.g., states and countries) can be reliably reported? Monitoring transborder information flows without state and international cooperation will not work. A uniform international electronic commercial code and cooperation between law enforcement organizations are required."

The Web page which referred me to all that described it as "e-cash for control freaks". It was much more approving of Eric Hughes's 1993 Cypherpunk Manifesto:

"Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn't want the whole world to know, but a secret matter is something one doesn't want anybody to know. Privacy is the power to selectively reveal oneself to the world.... The Cypherpunks are actively engaged in making the networks safer for privacy. Let us proceed together apace. Onward."

David Chaum founded DigiCash partly to ensure that e- cash-with-privacy stood a chance in the coming commercial shoot-out.

The outcome of that shoot-out will be determined largely by market dominance in server software. Netscape's security features are designed to make it safe to send your credit card number over the net. But credit card transactions are uneconomic for sums less than a few dollars.

Bill Gates insists both that Microsoft is working with VISA and not with any of the e-cash upstarts; and that the forthcoming Microsoft Merchant software will make transactions as small as one US cent economic. So he and VISA clearly have some kind of Switch-card- equivalent e-cash up their sleeves. The details are, needless to say, commercially confidential.